Happy hump day folks! While the sell-off lost a bit of momentum yesterday, we would like to make a special announcement this morning regarding our new Sunday addition to the Coachman’s Report: alongside our usual long-term pick, we have also started to compile a list of the ongoing private placement deals by investment banks in Canada that we will regularly update and publish within that report! So stay tuned for that and read on for your daily dose of market inspiration!
“The fool doth think he is wise, but the wise man knows himself to be a fool.”
- William Shakespeare
Market Talk
After the first hour of trading yesterday, the pullback lost steam and the market traded sideways - consequently, the $VIX settled at a value of 24 to cap off the trading day in a range far higher than we’ve been used to this quarter. A main economic catalyst yesterday supporting these lower prices have been startling figures released by the NAHB yesterday, some key ones of which were that new home sales are down 29.6% from one year ago which has brought new home sales to a 6-year low while leaving single-family home inventory elevated at 464, 000 (up 82% from a year ago) available for sale. Read the entire update here.
That said, while bullish investor sentiment gained steadily during the four-week bull run, the amount of bears is growing once again, last reported at 37.2% of investors as we kick off the trading day with the Dow, S&P and Nasdaq all up 14, 25 and 30bps respectively.
Long: II-VI Incorporated ($IIVI-NASDAQ) | Timeline: 2 days
II-VI Incorporated (IIVI), which develops, manufactures, and markets engineered materials, optoelectronic components, and devices worldwide has beat earnings and revenue estimates this morning by 3.64% and 3.2%, respectively. Despite a plethora of economic headwinds creating a challenging operating environment, “II-VI set new records for quarterly revenue in the fourth quarter and significant quarterly growth year-over-year, in response to sustained robust demand across our businesses” says CEO Vincent D. Matter (Source). Turning to the chart, IIVI has predominantly trended sideways up until this past quarter, falling about 25% since May. Although investors and traders showed less interest, IIVI still showed up to play as they beat estimates for the 12th straight quarter, giving bulls the catalyst they need in order to break through the 100-day MA into an uptrend.
Long: Transglobe Energy Inc ($TGL-TSX) Timeline: 2 days
Transglobe Energy Inc (TGL) is a Canadian-based oil & gas exploration, development, and production company based in Calgary, AB. Their operational sites are contained in Canada and Egypt. This company would be considered extremely undervalued as its current PE ratio rests at a mere 2.02 on a quarterly basis. Their success isn’t newfound either as the company has been profitable for the past 5 quarters, with their return on assets oscillating between 12, and 44%. From a technical angle, throughout the last few days, this company has broken through their 50-day MA of $4.50, with impressive momentum signalling that they could gap above the 200-day MA of $4.55. After momentum and MACD declined in early august they have both been climbing sustainably for the past 10 trading sessions.
Chart of the Day: Recession Indicator - Fall in global exports…
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